Apple’s App Store algorithms used to take into account download volumes and velocity as the two largest factors that determined an app’s rank. Ratings, however, started to impact rankings sometime in July, according to Fiksu’s earlier findings.
Developers can release updates for bug fixes and performance problems for a chance to start fresh – the new version’s ratings are featured more prominently in the App Store, and are those consumers see first when deciding to buy.
The actual cost per loyal user rose by 20 per cent from $1.50 to $1.80, hitting the highest priced month since December 2011, reports Fiksu.
Micah Adler, CEO of Fiksu, said: “There’s major sea change everywhere, now that Apple’s ranking algorithm appears to favour highly-rated apps and penalize others. App marketers must now work even harder to generate positive ratings from engaged users, since user acquisition costs for apps without stellar ratings will now be more expensive.”
According to the recently released Fiksu Indexes, July saw a significant increase in the cost to acquire mobile users.
Fisku points to several reasons for the increase including Apple's recent use of app ratings in its App Store Top Charts ranking algorithm, the increasing number of companies utilizing Facebook's mobile app install ads, and an uptick in mobile app downloads during the summer.
“App marketers must now work even harder to generate positive ratings from engaged users, since user acquisition costs for apps without stellar ratings will now be more expensive,” said Micah Adler, Fiksu CEO.
App engagement company Fiksu’s Cost per Loyal User Index increased 20 per cent July, to $1.80, compared to $1.50 in June. This made July the most expensive month for app marketing since December 2011.
"The continuing surge in mobile app users is attracting bigger brands eager to use apps to create long-lasting, ongoing engagement, and their spending is pushing up costs," Micah Adler, chief executive of Fiksu, said.
As the number of mobile app downloads increases across the United States, the cost for app developers to gain loyal customers has risen to its highest rate in two years, according to a new study by Fiksu.
Fiksu also noted today that user acquisition costs in the U.S. reached their highest level since 2011, rising to $1.80 in July, up 20 percent from $1.50 in June, making the month the most expensive since December 2011.
Facebook’s mobile app advertising platform is partially responsible by driving up competition, while deep-pocketed buyers are increasing, forcing the littler guys to spend more to keep up. The big-name publishers are now dominating the tops of the app store charts, making it harder for newcomers to reach the top 250, potentially turning the app stores into winner-takes-all markets.
It took Fiksu, a mobile app marketing software provider, to take a close enough look at what's going on to reveal last week that Apple has obviously been making major changes to its algorithm.
While some details may not be fully known to anyone outside of Cupertino, Calif., Fiksu published a blog post which showed the increased importance of a common measurement: user ratings:
"In late July, we first began to notice apps unexpectedly shifting position without a corresponding increase or decrease in downloads. Upon closer inspection, we discovered these position changes correlated with the apps' ratings... Apps with ratings of 4 or more stars received a rank boost in late July and have maintained that rank throughout August. Poorly rated apps with less than 3 stars received the opposite treatment about two weeks later, dropping off precipitously in rank and staying that way."
Application marketing costs increased 20 percent in July 2013, reaching their highest point since the end of 2011, mobile user acquisition platform Fiksu reports.
Fiksu's Cost per Loyal User Index, which measures the cost of acquiring a loyal user for brands that proactively market their apps, increased to $1.80 last month, up 30 cents from June and falling just one penny short of matching Dec. 2011's high of $1.81. Fiksu credited the surge to the growing number of brands leveraging Facebook's (NASDAQ:FB) mobile app install ads, which target consumers based on the apps and games they already access on their smartphones, as well as Apple's (NASDAQ:AAPL) recent efforts to factor iOS user ratings into its App Store Top Charts rankings.
Mobile app marketing costs jumped 20% to $1.80 per loyal user in July from $1.50 in June, while download volume was up slightly, according to the latest figures from mobile app marketing firm Fiksu.
The firm’s Cost per Loyal User Index tracks how much developers spend to acquire customers who open their apps at least three times a month.
Fiksu attributed the cost spike -- to its highest level since 2011 -- to growing demand for Facebook’s mobile app advertising tools as well as Apple’s recent step to start including ratings as a factor in App Store rankings. With higher-rated apps moving up the charts, the company surmised mid-ranked and lower-rated apps began spending more to try to regain ground.
And Fiksu’s success suggests four lessons that any start-up CEO should make sure to follow.
What is smartness? There are different kinds for different human endeavors. A smart football quarterback has little in common with a smart genetics researcher.
And you hardly ever come across an individual who is both a smart professor and a super-accomplished entrepreneur. Given my, perhaps twisted, values I am incredibly impressed by an individual who can excel in both of these fields.
That’s just the thing that Finland-born but U.S-raised Micah Adler has accomplished. His latest company’s name is a testament to his smartness. It’s called Fiksu - it means smart in Finnish - and the Boston-based start-up makes “a tech platform for programmatic mobile app advertising.”